Auction or bankruptcy in Catlin Gardens' future

SLATE HILL — Catlin Gardens, a romantically themed wedding venue on Route 6 that fell behind on mortgage payments and now owes its lenders $3.8 million, could soon be headed to the auction block.

Jessica DiNapoli

SLATE HILL — Catlin Gardens, a romantically themed wedding venue on Route 6 that fell behind on mortgage payments and now owes its lenders $3.8 million, could soon be headed to the auction block.

In late March, Acting Orange County Supreme Court Justice Catherine Bartlett appointed a referee to sell the property to repay its debts. Now, all the referee must do is schedule a date for the sale, which will be held in the Orange County Courthouse.

If the property is sold, couples who have put down deposits for weddings may lose those deposits and have to find a new venue to recite their vows, said Lewis Wrobel, a bankruptcy attorney.

John Stack, one of the owners of Catlin Gardens, said in an email that the catering hall will continue to stay open for business while it restructures its financial situation.

"We are confident that we will be continuing our business and growing it well into the future," he said.

Stack's prepared statement did not respond to further questions, and did not address the security of customer deposits.

Robert Krahulik, the catering venue's attorney, said Catlin has been "working hard" on refinancing its debt, a move that would likely cancel an auction.

The business may file for bankruptcy, he said. A bankruptcy would stall the foreclosure, allowing Catlin to continue operating and hosting weddings and other events, he said.

A bankruptcy would likely help Catlin get through this year's wedding season, Wrobel said.

"They can certainly buy a good amount of time by doing that," Wrobel said.

Last June, a few months after the foreclosure was filed, Krahulik said Catlin's financial problems stemmed from property damage caused by Hurricane Irene and Tropical Storm Lee. Catlin Creek, a focal point at the venue, overflowed, damaging the gardens and grounds.

Mary Kay Martin, Catlin Gardens' controller, said the business is "financially better off" than it's ever been. Instead of using deposits as they come in, how the business ran before, it saves them until the event happens, Martin said.

The move has allowed Catlin to build up its operating cash, she said.

In addition to its delinquent mortgage, Catlin is behind on payments under its tax-break agreement with Orange County, according to the Orange County Industrial Development Agency, which granted the business a 10-year payment-in-lieu-of-taxes arrangement in 2009.

The last payment the county received from Catlin was in September 2012 for a January bill, according to a county spokesman. In April, the IDA unanimously voted to allow its attorney to compel Catlin to make payments, or else cancel the tax break arrangement.

Ian Lindars, an attorney from Fishkill, plans to file a lawsuit over the deposit he lost at Catlin. He and his fiance, Emily Kermani, signed a contract last February for a wedding this June, but after hearing about the foreclosure, they asked for their money back.

The Stacks refused, stating that the couple had signed a contract, Lindars said. He was upset that the owners never disclosed their financial problems and was concerned about the possibility of the Stacks losing the property in the foreclosure.

"In my opinion, they were agreeing to perform something they had no idea they were going to be able to perform," Lindars said.

The couple set a date for July at a different venue. They had already booked a church on the same day as they had planned to have their wedding at Catlin Gardens, but it wasn't available on the new date.

Lindars and Kermani also had to toss toasting flutes, gifts for the mothers and cake-cutting accessories, all already engraved with the date scheduled at Catlin.

"It made a stressful ordeal much more stressful," Lindars said. "It put a damper on the whole wedding."

Another couple, Tim Smith of Highland and his bride, Leslie DeGroat, soon to officially become Leslie Smith, held their wedding ceremony and reception at Catlin Gardens May 18.

Like Lindars and Kermani, Smith and DeGroat had asked for their deposit back after hearing about the foreclosure. The Stacks refused, and Smith and DeGroat went forward with their wedding plans, not wanting to lose their investment.

In the weeks leading up to the big day, Smith saw that the landscaping, which had attracted the couple to the venue in the first place, wasn't up to snuff. The fountains were dirty, tulips weren't planted and trees needed pruning, Smith said.

Staff at Catlin Gardens addressed some of their concerns about the condition of the grounds a few days before the wedding, but not everything, Smith said.

He said the food at his wedding was great, but the aggravation and worry about whether or not the venue's doors would be closed before his nuptials stressed him out.

"It was an enjoyable time," he said. "Leading up to it was not an enjoyable time."